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and I think, "What the hell did I say that stuff for?" I still think it's a good idea that I do.

You said you think that's why some people die because they cease to have a reason for living?

Yes

. Are you scared of what lice ahead?

Yes, I believe that people have to have a reason to get out of bed in the morning. I'm scared that
if I don't have a reason, I won't get out of bed, but I'm sure Caroline will take care of that and
I'll find things to do and maybe I'll do some more television or something. I might do something.

Are you going to write more poetry?

No, never. I don't need to now, I'm not between marriages. But if you keep asking these questions
about my love life, I will be.

If nothing else, you have a future flogging Alan Jones's Tongue. Thank you very much.

How are you George?

Hello, John the stage manager told me to tell you, it's time.

It's time? Well that's great George, let's go now?

No John, time for a commercial.

Tell me, have you got anything on tonight?

Yes, and I'm going to keep it on, too.

Alright. We'll be right back in a minute. Right now I have to explain to George how to succeed in
showbiz without really trying. Come on George, my dear. Closed Captions by CSI

test test test t Home writes the votes are. John Howard boroughs from the

A home being an almost sacred part of the Australian Liberal creed. Stretching back to Menzies
memorable evocation of homes

The Coalition targets housing affordability and education expenses

We have a better plan for working families because you know something, if I am elected to become
Prime Minister I am going to be around for the future unlike John Howard who says he is retiring.

Good evening, welcome to 'Lateline'. Border security and immigration gratious detention barely rate
add mention in this campaign. It appeared to be the forgotten issue of Australian politics but
tonight we report on the tragic separation of a father and his child in one of Australia's worst
untold immigration scandals. Tony Tran will never forget the way his life was taken away by the
Federal Government. Having lived in Australia for 7 years Tony had married a South Korean woman,
had an Australian-born toddler, a mortgage, a tax file number and big plans for his family's future
in Brisbane

I didn't expect to get locked up like that so I never get to say goodbye or never get to kiss my
son.

Have you ever seen your wife again since that morning?

No

. That was the last time you saw your wife that morning?

Yes

. Like Cornelia Rau and Vivian Solon Tony Tran was wrongfully detained. As a result his family was
shattered, five and a half years of his life were stolen. Our exclusive report by Margot O'Neill is
coming up. Kidnap and intimidation ASIO agents could face criminal charges over their handling of a
terrorist suspect. Hold the front page, claims that a senior journalist asked an independent
candidate to give

$9 billion in election sweeteners in Liberals' campaign launch

TONY JONES: The election campaign may be entering its final 11 days, but the Coalition waited until
today to officially launch its bid for another term.

Labor's launch will be even later with its campaign spectacular on Wednesday.

And despite the looming spectre of rising inflation, John Howard came armed with a fistful of
dollars to win over the mums and dads of the marginal seats he needs, if he's to retain government.

They're the same so-called "Howard battlers" who swept him into power 11 years ago, but if the
polls are right, their loyalties appear to be shifting to Kevin Rudd.

Mr Howard's big spending campaign pitch today was aimed squarely at them with promises on
childcare, education and first home ownership.

Dana Robertson reports.

DANA ROBERTSON: Win or lose, it was John Howard's final campaign launch, and the Prime Minister's
rapturous welcome belied the dire predictions of the pollsters.

JOHN HOWARD, PRIME MINISTER: I want to tell you why I believe the Coalition should be returned. I
want to tell you why I want to be Prime Minister of this country again.

DANA ROBERTSON: It took John Howard until a full 23 minutes into his speech to get spending. But
when he did, he didn't hold back. Close to $10 billion in promises were rolled out, aimed squarely
at the so-called working families Kevin Rudd sought to make his own. Childcare, education and
housing affordability were the targets.

JOHN HOWARD: The best years of this nation lie ahead. I want to complete the transition of this
nation from a welfare state to an opportunity society.

DANA ROBERTSON: The Government's indulged in its own piece of me-tooism by seeking to go on-up on
Labor's 30 per cent education tax rebate for laptop computers. John Howard's promising a 40 per
cent rebate worth $800 for high school students and $400 for primary school children and
preschoolers.

It'll cost $4 billion more than the Labor plan because it would offset all education expenses,
including private school fees.

JOHN HOWARD: Let me emphasise that all Australian families will benefit from the full value of this
rebate irrespective of their income.

DANA ROBERTSON: But Mr Howard's promises to parents didn't end there. To counter Labor's pledge to
increase the childcare tax rebate, Mr Howard's announced a re-elected Coalition would pay the 30
per cent refund straight to daycare providers.

JOHN HOWARD: As a result more than 500,000 families will have their current childcare costs
dramatically reduced, and families will see the benefit of reduced fees from the 1 April 2008.

DANA ROBERTSON: Neither was the Prime Minister to be outdone on housing affordability, committing
$2.2 billion to help first home buyers.

JOHN HOWARD: The Coalition is committed to Australia remaining a great home-owning society, indeed,
one of the greatest in the world.

DANA ROBERTSON: Like the Opposition, the Government's offering special savings accounts for first
home buyers. People under 40 could contribute up to $10,000 a year. The first $1,000 would be tax
free and there would be no tax on the earnings. Under 18-year-olds could put in up to $1,000 a
year. There's also the promise to abolish capital gains tax for parents who share equity in their
child's first home.

JOHN HOWARD: This is the essence of the opportunity society I want Australia to become, where
people are encouraged to work hard, save, look after their families and contribute to their
communities.

KEVIN RUDD, OPPOSITION LEADER: Mr Howard is retiring and he will not be around to take
responsibility for anything that's been said today, and so people across Australia will be asking
themselves this question, "What's the point?"

DANA ROBERTSON: But today wasn't the day John Howard wanted to dwell on his retirement. So while he
did pay tribute to his would-be successor, the focus was firmly on him.

JOHN HOWARD: Love me or loathe me, the Australian people know where I stand and what I believe in.

DANA ROBERTSON: And occasionally, his opponent.

JOHN HOWARD: For a fairly hollow Labor Party, led by a man whose core beliefs are obscure and
unknown to the Australian public, and perhaps to he himself.

DANA ROBERTSON: But it was left to Peter Costello to provide the laughs.

PETER COSTELLO, TREASURER: They'd have you believe there were never reds under the beds, just
economic conservatives.

DANA ROBERTSON: In fewer than 15 minutes this afternoon, John Howard parted with nearly $10 billion
to fund his family-friendly election promises, outstripping even the $6 billion he splurged at his
campaign launch three years ago. But in a climate of rising interest rates, spending sprees might
not buy votes like they used to. Especially when the Reserve Bank's warning of stronger medium-term
inflationary pressures.

In a statement today, it says both headline and underlying inflation are likely to exceed 3 per
cent. And that inflation will become more difficult to contain.

JOHN HOWARD: There are storm clouds gathering on the horizon when it comes to economic management
and if we get it wrong, the prosperity we've enjoyed over the last 11.5 years can be severely
compromised.

KEVIN RUDD: We will not be spending as much as Mr Howard does in this election and furthermore
we've already nominated $3 billion worth of savings, I've seen nothing from Mr Howard.

DANA ROBERTSON: Mr Rudd's promising his campaign launch spending won't be as lavish as the
Coalition's. The proof will come at the same Brisbane venue in two days time. Dana Robertson,
Lateline.

Wrongfully detained for 5 years - the tragic story of Tony Tran

DANA ROBERTSON: You're probably familiar with the names Cornelia Rau and Vivian Solon, both victims
of immigration scandals involving illegal detention or deportation. Tonight another such case has
come to light.

It 's difficult to imagine the nightmare endured by Tony Tran.

A young husband and father, he was wrongfully locked-up for five and a half years; he was separated
from his wife, who went back overseas and now can't be found; he lost his home and his livelihood
and his Australian-born son was put into foster care while an attempt was made to deport the boy
without his father's knowledge.

You may think, well, it can't get worse than that.

But while in detention Tony Tran was stabbed and bashed by another inmate and now suffers a range
of chronic health problems.

Despite all this the Government has never apologised. Indeed, Tony Tran and his son still face
possible deportation, although they're stateless with no citizenship rights anywhere else in the
world.

So tonight we ask: why is his case - and that of his nine-year-old son - being allowed to drag on?
Questions neither side of politics appear anxious to comment on in an election campaign.

Tony Tran told his story exclusively to Lateline's Margot O'Neill.

MARGOT O'NEILL: Tony Tran will never forget the day his life was taken away by the Federal
Government. Having lived in Australia for seven years, Tony Tran had married a South Korean woman,
had an Australian-born toddler, a mortgage, a tax file number and big plans for his family's future
in Brisbane. But 18 months about inquiring about a spouse visa for his wife, Tony Tran found
himself handcuffed and taken to jail. It was December 1999 he would never see his wife again.

TONY TRAN: I didn't expect to get locked up like that, so I never get to say goodbye or never get
to kiss my son.

MARGOT O'NEILL: Have you ever seen your wife again since that morning?

TONY TRAN: No.

MARGOT O'NEILL: That was the last time you saw your wife, that morning?

TONY TRAN: Yes.

MARGOT O'NEILL: Tony Tran, who was born in Vietnam but had grown up in the United States as a
refugee was told he was an illegal resident in Australia. He believed he'd had a valid visa, but
immigration officials told him it had been cancelled years before. The problem is that Tony Tran
had never been properly notified. The letter from Immigration had been returned unopened to the
Department, and a person must be properly notified before any action can be taken against them.

DAVID MANNE, DIRECTOR, REFUGEE & IMMIGRATION LEGAL CENTRE: He should never have been in there in
the first place. He should never have been locked up. Under Australian law, if you're not properly
notified of a decision, it is unlawful for you to be detained.

MARGOT O'NEILL: But worst was to come. Tony Tran's wife and child are also facing detention, so she
agrees to go back to South Korea, taking their then two-year-old son with her.

Immigration officials help prepare the paperwork and their son is given a South Korean passport,
but not in his legally registered name Tran, the same as his father. Instead his name is altered to
a Korean name to facilitate his entry into South Korea.

This is all done without Tony Tran's knowledge or consent. He found out he'd lost his family from
an immigration official after they'd already gone to South Korea.

TONY TRAN: When they taken my child, that's when everything just collapsed for me mentally and
physically. I thought I lost them. I thought I'd never see him again. Because I don't even know how
my life is going to end.

MARGOT O'NEILL: How did you cope with that feeling?

TONY TRAN: You just... You just can't really cope with it, actually. It's mainly medication. I was
on medication the whole time I was there.

MARGOT O'NEILL: Two years later, Tony Tran's wife returns briefly to Queensland where she abandons
Hai, who's now four. She says she can't cope as a single mother. She then disappears back in South
Korea.

State child welfare officials write to the Immigration Department saying it would be best if Tony
Tran could care for his son in the community. Immigration refuses. Ultimately, Hai ends up in
foster care against Tony Tran's wishes.

Transferred between four different detention centres in four states, Mr Tran claims the Immigration
Department prevents him from attending the Children's Court hearings.

TONY TRAN: So they said that, well, if you want to attend the court, you have to organise it
yourself. Now if you are in detention centre with fences around you, how are you going to organise
something like that?

MARGOT O'NEILL: Powerless from inside immigration prison, Tony Tran yearns to see his son but
doesn't want Hai to see his desperate plight. Immigration officials refused to allow them to meet
outside detention, so father and son hang onto each other through weekly telephone calls.

(To Tony Tran) And so you never told him that you were in detention, you wanted to protect him?

TONY TRAN: Yes.

MARGOT O'NEILL: What did you tell him?

TONY TRAN: I told him that just to study hard, and that we have a long line of brainy people in our
family, and that you have to study hard because they are working very hard to pay for his school
fees and I was working far away, and that I'll be back one day. That's all I can say.

MARGOT O'NEILL: How did he go?

TONY TRAN: The thought of my son saying, like, "Dad, when can I see you? When can I touch you?"
Because he all he have is picture of me, and that was it.

MARGOT O'NEILL: Tony Tran wants to send his son a new photo taken inside Baxter detention centre.
But it takes months of paperwork and finally, officials refuse to process it, he says, until one
days when he threatens to jump off a roof.

TONY TRAN: I get to the point where I have to climb on the roof at Baxter and threaten to jump if
they don't process my picture so I can send to my son. Within like an hour or so, they processed
it.

MARGOT O'NEILL: Despite Tony Tran's anguish at being separated from his son, immigration officials
claim he doesn't care about the child when they contact migration agent Libby Hogarth about the
case.

LIBBY HOGARTH, MIGRATION AGENT: Basically I was told that the father wasn't being very cooperative
and really hadn't taken much interest in the child's welfare.

MARGOT O'NEILL: She's shocked when she finally talks to Tony Tran.

LIBBY HOGARTH: I talked to him about his son and it was very, very obvious to me that the major
concern in his life was his young son who he hadn't seen for a number of years.

MARGOT O'NEILL: Meanwhile, immigration officials try to arrange to deport Hai back to Korea and
leave the now five-year-old in the custody of Korean welfare, effectively as an orphan as this
letter from Immigration shows.

EXCERPT OF LETTER (read by actor): My purpose in writing to you is to request that, as the child is
a Korean national, the Korean Consulate arrange for the return of the child to Korea in
coordination with the Health and Welfare Agency in Seoul.

DAVID MANNE: Even though he's in detention, he has rights. There is a duty of care owed to Tony at
this time not to prevent him from effectively exercising the legal rights that he has under
Australian law in relation to the care and custody of his son, Hai.

MARGOT O'NEILL: Who knows how long Tony Tran's saga might have dragged on. But the scandals about
the illegal detention of Cornelia Rau and deportation of Australian citizen Vivian Alvarez Solon
prompt a thorough review of all detention cases. And then, on the 7 June 2005, with no warning,
Tony Tran is set free.

He can't remember much about that first week expect that he finally reunites with the son he'd put
to sleep every night as a baby, but hadn't seen in more than five years.

TONY TRAN: It's nice to have him in my arms again. Because as a parent all you do is protect your
children and that I finally get to protect him and cuddle him and put him back to sleep again.

MARGOT O'NEILL: At first Hai has nightmares, afraid that his father will leave him again.

TONY TRAN: That's very heartbreaking actually. Even when I got him back, every night he will have
nightmare. Even when he's asleep, his hand will twirl around just to feel if I was there and he'll
wake up and pinch my skin whether to see it's real or not. And then after that he'll go back to
sleep again. Everyday I told him that I will always be here.

MARGOT O'NEILL: After five and a half years of wrongful detention and agonising separation from his
child, Tony Tran is released with a letter from the Government admitting that he'd actually had
valid visas since 1993.

So Tony Tran had been legal all the time. But two years after his release, there's no resolution of
his or his son's ability to stay in Australia. No compensation, no apology. And even though he has
no rights of citizenship anywhere else and has now been in Australia for 14 years, Tony Tran and
his son could still be deported unless they're given permanent residence.

DAVID MANNE: Their future fate is completely uncertain. They have nowhere else to go, and yet in
Australia they have no permanent status.

MARGOT O'NEILL: This ongoing instability makes it more difficult for 35-year-old Tony Tran to
recover his health, which dramatically deteriorated during his years of incarceration. He was
savagely bashed and stabbed by an unstable inmate.

TONY TRAN: The policeman have said that they have found like a six-inch homemade nail on a handle,
so he stabbed me with it and he smashed me between my eyes.

MARGOT O'NEILL: A private ombudsman's report seen by Lateline concluded in July this year that part
or all of Tony Tran's detention may have been unlawful, and recommends the Government investigate a
remedy for Mr Tran.

But for nearly a year, lawyers have tried to sit down with the Government to negotiate compensation
to no effect. They have now filed a suit in the Victorian Supreme Court which could result in one
of the biggest immigration payouts in history. Another damages suit for Tony's son, Hai, will
follow.

DAVID SHAW, PARTNER, HOLDING REDLICH LAW FIRM: I think this is a matter which is capable of being
resolved relatively quickly with good will on both sides. We've been seeking to have negotiations
with the Government since February this year. I'd love to see a situation where Tony and his son
could have their status resolved by Christmas.

LIBBY HOGARTH: I just have the most amazing respect for Tony for the way that he's got on with his
life since his release, the way he's managed his child and really worked so hard at giving that
child some stability in life whilst still in such a limbo period, because he still doesn't have any
decision on our request to the Minister to intervene in his case, that's been sitting before the
Minister for nearly two years now, and so we're still waiting for some answer and some closure on
this case.

MARGOT O'NEILL: Tony Tran now battles depression, asthma and a heart condition. He lives on charity
in Melbourne while studying to get a degree in radiology.

TONY TRAN: When you ask me how do I feel, I don't really know what to feel. I just want to, most of
the time, just want to be secluded, just want to be myself for now. For me my main focus is, like,
my son. To hope that he can grow up and lead a normal life. For me, I'm trying as well. It's not
easy but I'm trying as well.

MARGOT O'NEILL: Margot O'Neill, Lateline.

TONY JONES: Lateline sought interviews from both the Immigration Minister, Kevin Andrews, and his
Labor counterpart, Tony Burke.

Mr Andrews' office returned our calls late tonight after being tied up today with campaign issues
and they undertook to look at the case tomorrow.

Mr Burke was unable to join us tonight also because of campaign commitments.

tomorrow. Mr Bourke was unable to join us tonight also because of campaign

Candidate claims journalist offered her inducements to direct preferences to minister

TONY JONES: An independent candidate for the Sydney seat of Wentworth says she'll ask the
Australian Electoral Commission to investigate a senior journalist's suggestion that she give her
preferences to Malcolm Turnbull.

A weekend Galaxy poll indicated that voting in the Environment Minister's seat could be decided by
preferences from independents and the minor parties.

Well, the anti-pulp mill candidate, Danielle Ecuyer, claims The Australian newspaper's Caroline
Overington offered her front-page coverage in return for directing preferences to Mr Turnbull. Ms
Ecuyer says she'll be lodging a formal complaint with the Electoral Commission later this week.

John Stewart reports.

JOHN STEWART: Danielle Ecuyer is campaigning against the Tasmanian pulp mill, which she claims the
major parties are too timid to halt. The green vote in Wentworth has been gaining momentum in
recent weeks after the federal Environment Minister Malcolm Turnbull gave conditional approval to
the mill.

A Galaxy poll on Sunday showed that Malcolm Turnbull was neck and neck with the Labor candidate,
George Newhouse. The marginal seat now appears to be poised on an electoral knife edge.

Ms Ecuyer, a former partner of George Newhouse, has the top spot in the local ballot paper and has
been under increasing pressure to announce who'll she direct preferences to. She claims that a
senior journalist with The Australian newspaper, Caroline Overington, sent her an email telling her
to direct preferences to Malcolm Turnbull.

DANIELLE ECUYER, INDEPENDENT CANDIDATE FOR WENTWORTH: "Please preference Malcolm. It would be such
a good front page story. Also, he'd be a loss to the Parliament and George, forgive me, would be no
gain."

JOHN STEWART: What was your reaction to that email?

DANIELLE ECUYER: I was absolutely amazed. I could not believe that a senior journalist at The
Australian would actually come forth so prominently and put it down in an email.

JOHN STEWART: Ms Ecuyer plans to lodge a formal complaint with the Australian Electoral Commission
later this week. She claims the journalist's offer was not a one-off.

DANIELLE ECUYER: Very much an inducement, it was not only trying to bias me in terms of who I
preference, but okay, we'll make you really famous and it would be such a good front page story,
which has actually happened on another occasions about the pulp Malcolm ad. I was asked on a few
occasions would I pulp George, similar type of thing, it would make a really good front page story.

JOHN STEWART: Caroline Overington denies she tried to influence Danielle Ecuyer and told the ABC's
Media Watch program:

"I would say journalists use a range of different ways to get their stories. I would say I didn't
ask her to send her preferences to any candidate."

JOHN STEWART: When Caroline Overington learnt that the Australian Electoral Commission would
investigate Danielle Ecuyer's complaint, she told Lateline:

"I'm absolutely thrilled. I wonder if I can wear my "Malcolm for PM" t-shirt to the hearing."

The AEC tonight said:

"The Australian Electoral Commission is unable to ascertain that an offence has been committed
under section 326 of the Commonwealth Electoral Act. However, the AEC will look at any complaint
brought to it."

The independent candidate says she'll announce her preferences this weekend.

DANIELLE ECUYER: The minor parties that are putting climate change and are running on an anti-pulp
mill ticket will be put ahead of either of the major parties.

JOHN STEWART: With 11 candidates running in the seats, the independents may determine if Malcolm
Turnbull remains the member for Wentworth. John Stewart, Lateline.

Judge says ASIO officers kidnapped, intimidated terrorism suspect

TONY JONES: ASIO agents apparently treated a terror suspect so badly that the case against him had
to be dropped.

They're accused of kidnapping and intimidating a medical student who was due to face trial on
charges of training with a terror group in Pakistan. But a Supreme Court judge threw out much of
the evidence, saying the two agents who gathered it acted improperly, incompetently and possibly
criminally.

National security correspondent Leigh Sales reports.

LEIGH SALES: Yesterday Izhar ul-Haque was an accused terrorist, today he walked out of court a free
man.

ADAM HOUDA, LAWYER: From the beginning this was no more than a political show trial designed to
justify the billions of dollars spent on counter-terrorism. It's been one bungled prosecution after
another.

LEIGH SALES: In late 2003 ASIO operatives picked up Izhar ul-Haque at Blacktown train station. He
was driven to a park, questioned and then taken to his parents' house where the Federal Police also
appeared. Later Mr ul-Haque was charged with receiving terrorist training. The NSW Supreme Court
threw out much of the evidence against the Sydney medical student, branding it inadmissible because
of the way ASIO interrogated him. The court heard that ASIO led Mr ul-Haque to believe he or his
family would be physically harmed if he didn't cooperate.

(Excerpt of Justice Michael Adam's judgment)

"The ASIO agents ASIO B15 and BI6 committed the criminal offences of false imprisonment and
kidnapping at common law... their conduct was grossly improper and constituted an unjustified and
unlawful interference with the personal liberty of the accused."

The Attorney-General oversees ASIO but is undeterred.

PHILLIP RUDDOCK, ATTORNEY-GENERAL: If there is to be any judgements drawn about the conduct of
others in relation these proceedings, it would come through the proper investigations.

ADAM HOUDA: This has been a moronic prosecution right from the start.

LEIGH SALES: The mishandling of Izhar ul-Haque's case follows the disaster prosecution of Dr
Mohamed Haneef.

KEVIN RUDD, OPPOSITION LEADER: I think there are enough concerns being raised in what has come out
of the public domain so far in the Haneef case to cause people to realise we actually have to get
to the bottom of the specific application of these laws in individual circumstances.

LEIGH SALES: Neither ASIO nor the Federal Police would comment today. Leigh Sales, Lateline.

Another senior figure quits in police integrity hearing

TONY JONES: Meanwhile the Victoria Police force has been further rocked with the resignation of
another senior figure.

The head of the force's media and communications unit, Stephen Linnell, left his job this morning,
but was still required to appear before a hearing of the Office of Police Integrity.

Mr Linnell admitted to lawyers that he'd lied and inappropriately passed on information.

Helen Brown reports.

HELEN BROWN: Stephen Linnell has appeared twice at the public hearings, and the director of police
media admitted today that at his first appearance last Wednesday and at previous secret
appearances, he'd lied.

(Court transcript)

GREG LYON SC, COUNSEL ASSISTING: Do you acknowledge that you did not always tell the truth?

STEPHEN LINNELL: Yes, I do.

HELEN BROWN: Mr Linnell agreed he'd passed on highly sensitive information to then assistant
commissioner, Noel Ashby, when he shouldn't have. The Office of Police Integrity has accused senior
police figures of leaking information to the target of an investigation. Former detective sergeant
Peter Lalor has been accused of being involved in the death of male prostitute Shane
Chartres-Abbott.

The OPI alleges that Mr Lalor became aware he was under investigation and facing possible arrest.
Mr Linnell said that while he showed Noel Ashby some information, he didn't mention details of the
possible arrest of detective Lalor.

STEPHEN LINNELL (excerpt from court transcript): I was already feeling guilty about showing him the
document... it's cost me my job and everything else. There was no way I was going to tell him.

HELEN BROWN: Stephen Linnell resigned this morning before the hearing started. He was given
immunity from his evidence being used in further criminal or civil hearings but could still face
charges of perjury. His resignation follows that of Noel Ashby, who until last Friday was one of
the highest ranked officers in the police force.

STEPHEN LINNELL (excerpt from court transcript) : He was a mentor. He was my best mate.

HELEN BROWN: Secretly-taped telephone conversations show that Noel Ashby leaked sensitive
information to the secretary of the Police Association, Paul Mullett, about internal politics and
appointments. But what the OPI has not yet shown is that Noel Ashby passed on information to Paul
Mullett about the target of the investigation into the 2003 murder. Mr Mullett's expected to take
the stand on Wednesday.

PROF COLLEEN LEWIS, CRIMINAL JUSTICE DEPT, MONASH UNI: Mr Mullett is an extremely powerful union
man, he's particular style is somewhat confrontational.

HELEN BROWN: Today the Victorian Premier was distancing himself from the scandal after it emerged
Stephen Linnell indicated to a Labor figure he was about to appear before a secret OPI hearing.
John Brumby says there's nothing questionable about how he learnt of the private hearings.

JOHN BRUMBY, VICTORIAN PREMIER: The secretary of DPC was advised by the OPI, as he should be, as
the secretary of the department, and he verbally advised me that those hearings would be held in
the next week.

HELEN BROWN: A third police officer was questioned today. Inspector Glenn Weir is accused of
helping Mr Ashby and Mr Linnell as the two men became increasingly suspicious that their phones
were bugged. The hearings also accused Mr Weir of breaching OPI confidentiality.

GLENN WEIR, VICTORIAN POLICE: Look, I'm stunned, I've got no idea where this has come from, I can't
see what I've done wrong. I mean, to be actually linked in with all the other stuff that's happened
this morning?

HELEN BROWN: The hearing resumes on Wednesday. Helen Brown, Lateline.

US states jockey for positions of influence in presidential race

TONY JONES: As the finish line now looms in Australia's marathon election campaign, the longest and
costliest race in US history is already well underway to elect a new president.

But it's a vote that still won't be taken for 12 months.

Well, in an attempt to have a greater say in the outcome of who'll become the 44th president, the
states have been changing the dates of their caucuses and primaries. But the shifting dates are
creating anger, anxiety and uncertainty.

North America correspondent Mark Simkin reports from the home of the first caucus, Iowa.

MARK SIMKIM: Three times a month the Marshall town church hall becomes a dance hall and the
residents kick up their heels.

They may not look like political junkies but these men and women have a big say in who becomes
president. The American presidential candidates aren't picked by the parties, they're elected by
the states. Because Iowa is always first, its caucus-goers are particularly powerful.

MAN: If I had to vote right today, it'd be Bill Richardson.

SECOND MAN: Fred Thompson. Yeah.

WOMAN: I like what Huckabee has to say.

SECOND MAN: Both very strong conservatives.

SECOND WOMAN: I'd vote for Hillary.

THIRD MAN: I would not vote for Hillary.

THIRD WOMAN: Yeah, I would not either. I feel we've had enough Clintons in the White House.

FOURTH WOMAN: Until we come to realise that we've got to put God back in the centre of our country,
which is what it's founded on, was Christianity, we're just going to keep going down.

MARK SIMKIM: The state can make or break a candidate. At this stage in 2004, Howard Dean was well
ahead of the other Democrats in the polls, and John Kerry was below 10 per cent. Iowa changed all
that: Kerry won and went on to secure the nomination. Howard Dean finished third and never
recovered, despite his caucus night bravado.

(To Jerry Mayer) How seriously do those states take their status of being first in the nation?

JERRY MAYER, GEORGE MASON UNIVERSITY: Well, how seriously do Australians take beer? I mean, it is
really vital to the identity of New Hampshire and Iowa. It is the only reason many Americans know
these states. It is - if you live in New Hampshire, you have about a one in four chance of shaking
hands with a future president.

MARK SIMKIM: The candidates certainly understand that, and they showed the state remarkable
deference.

JOE BIDEN, DEMOCRATIC PRESIDENTIAL CANDIDATE: The candidates owe you, we owe you for taking this as
seriously as you do.

MARK SIMKIM: Some states haven't had a single visit from a presidential candidate this year, but so
far Iowa's hosted more than 15,000 campaign events. Joe Biden accounts for more than 150 of them.

(To Joe Biden) How important is it that Iowa be first in the nation and what do you think of the
other states queue jumping?

JOE BIDEN: It's critical, the reason being it's the only place you can compete without having tens
of millions of dollars.

MARK SIMKIM: Iowa takes its role as first in the nation so seriously there's even a museum exhibit
celebrating and explaining it.

CYNDI PEDERSON, IOWA CULTURAL AFFAIRS (to group of school children): The campaigns have all
strategies. If the weather is bad, they'll have a whole strategy designed to getting people to the
caucuses. And if that means they have to rent buses and vans to go to people's homes and pick them
up, they do that.

MARK SIMKIM: Cyndi Pederson is the director of the Department of cultural affairs. She says the
caucus process encourages retail politics.

CYNDI PEDERSON: Candidates know that you have to meet a voter at least seven times in Iowa. Voters
in Iowa take it very seriously, they're not swayed by star power or any kind of other pressure.
they know they want to understand the issues that candidates stand for and it may take a couple
seven times before they are finally swayer one way or another.

MARK SIMKIM: Yet Iowa's exulted position is under threat. The other states are suffering relevance
deprivation syndrome. Florida, Michigan, Nevada and South Carolina brought forward the dates of
their primaries and caucuses, leapfrogging each other, trying to get a bigger say. An avalanche of
states will now vote in early February, including important places like California.

JERRY MAYER: They had a good argument. We are the largest population state in America and we have
not mattered in selecting the nominees for either party since about 1976. There's something wrong
with that.

MARK SIMKIM: To stay at the front of the queue, Iowa moved its caucus to January 3. New Hampshire
could still shift its primary to next month, although January 8 is more likely. The general
election campaign will last nine months, the longest in history.

JERRY MAYER: It is going to influence the outcome, it is very significant for campaigns like
Richardson's, where he is the first Hispanic to run for the presidency from a major party. Well,
Nevada has a lot more Hispanics than New Hampshire does. So the earlier Nevada gets, the earlier
California gets, hypothetically the better Richardson would do.

MARK SIMKIM: It's been an unseemly uncertain rush and the people of Iowa aren't impressed. These
pig farmers say they've been bombarded with political pamphlets and TV ads, and they're even
offered live phone conference calls with candidates. They think the other states are being silly.

MARK HILLERMAN, PIG FARMER: Yeah, just like a bunch of kids playing in the sandbox. Kids.

MARK SIMKIM: In what way are they like kids?

MARK HILLERMAN: Oh, they can't make up their mind, they jump around, everybody wants to be first.
You know, "me first, me first". And most people just sit back, kind of laugh at it, right. I think
it's just ridiculous.

MARK SIMKIM: But should Iowa always go first? Just 200,000 people vote in the caucuses here and yet
they set the agenda for a nation of 300 million people. Overwhelmingly white, reasonably wealthy
and mainly rural, it's hardly the most representative state in the country.

MAN: We're good, hardworking honest people in the corn belt.

SECOND MAN: It brings a lot of money into the Iowa economy.

WOMAN: Having all the people here.

SECOND MAN: And I think it's quite important.

SECOND WOMAN: I think it's just tradition. It's been that way for as long as I can remember.

MARK SIMKIM: The political parties are furious, the Democrats are punishing Florida for changing
dates by prohibiting its candidates from campaigning there.

Many politicians and political scientists agree that the current process is an embarrassment, but
they can't agree on what to do about it. Some thing the smaller states should get to go first.
Others say that a rotating regional system would be better, and some think that an American idol
style phone-in knockout would be preferable to the current mess.

In 2004, nine states voted before early February. In 2008, more than 20 will. Mark Simkin,
Lateline.

In 2004 nine States voted before early February, in 2008 more than 20 will. The weather now - an
afternoon or evening storm for Darwin. Showers in Brisbane. Fine and dry in Adelaide and the other
capital cities. 'Lateline Business' in a moment. But if you would like to look back at our stories
or transcripts visit our web site but now here is 'Lateline Business' with Ali Moore. Tonight the
Reserve Bank identifies tax cuts as a trigger for rising interest rates.

The tax cuts are certainly a large amount of money making that job more difficult for the Reserve
Bank.

BHP Billiton begins the hard self its bid to buy Rio Tinto arguing irresistible logic and saying it
is very patient. Priced for perfection. Orica's profit dispoints investors.

The market did not appreciate the result today. The market is down overall but Orica is down as
well.

The markets - after renewed credit concerns triggered a weekend fall on Wall Street Australian
shares plunge ed to a seven-week low. The All Ordinaries dropped 1.40 per cent, resource stocks hit
by weaker oil and metal prices except Takeover Target Rio Tinto which hit record highs. Despite
that the ASX200 gave up 90 point. In Japan the Nikkei fell 2.5 per cent wiping out its gains for
the entire year T news was worse in Hong Kong. A widespread sell off saw the Hang Seng tumble 4 per
cent but London has defied the trend with the FTSE rebounding 11 point. BHP Billiton has started to
publically sell the merits for its bid for Rio Tinto squashing rup rumours it is set to hive off
its petroleum division. Stepping up the pressure on Rio Tinto's bored BHP Billiton promises a $33
billion share buy-back and annual safings of $4 billion. CEO Marius Kloppers says talks with
investors will bee begin immediately 60 or 70 per cent of whom own stock in both companies

The share holder overlap is significant which is why we believe this is such a compelling
transaction because the value that we will create will essentially be created for people who are
owning both shares and who merely will hold something that in future will be worth more than the
two pieces of paper they hold at the moment.

BHP Billiton has organised more than $70 billion of funding to cover the share dieback and the
merger but would not be drawn fit would be hostile if Rio Tinto refuses to talk. Presumeing it has
held preliminary discussion was the ACCC and regulators it is confident competition concernless be
manageable while customers will be won over by faster production and delivery. Rio closed at
$179.320 in London up 4.5 per cent. For a closer look at what Marius Kloppers had to say we are
joined by Stephen Pope in Europe. Listening to Marius Kloppers today it seemed it was all about
understanding this deal and the irresistible logic. Is he convincing? Yes, I think so. Certainly if
you listen to what he had to say then run through some of the power point presentations on their
web site I think you can start the see that both companies have very similar quality operations.
They both look at very long lived operations and I think the low-cost factor comes in. There would
not be a long time of trying to bed down separate corporate cultures. It would fit pretty quickly
together and cutting out the overlap and getting a faster program development and faster time the
market process of newer production Compassfy, that will come to good so you are looking at showing
text issing the shareholders in Rio Tinto you join in, you are 48 per cent of the new company and
getting a 28 per cent minimum and that is the opening shot. Can I say that, opening shot. Today
Marius Kloppers was very keen to say this is early days and he will not talk about uping the bid or
whether or not he would go hostile but it seems that Rio Tinto is absolutely firm that this current
offer is well below ballpark.. they are right. It is well below ball bark park if the London
perspective when it was announced they had been speaking it was ?52 was the proposed level and I
said 55 was more likely and that was achieved at lunchtime and we are into new Territory with
estimates suggesting ?70 so this is a combination of an enhanced deal, more cash coming into the
pot to sweeten the idea but believe me the fact that the word in of the presentations was that we
now apeople to the broader share holder base that is trying to reach above the Rio Tinto board and
showing they are serious and mean business and they want to keep a cosy set of letters between
board members so we are in a hostile position. It is a purely scrip bid. Do you think there will
have to be a cash component and given they have raised funding to cover the debt of a combined
group and a buyback and given they will not sell petroleum does that not indicate that cash will
not be part of this deal?

I think you can say there will be cash me vision to handle existing debt or you may take that and
put it in the the pot to induce the existing shareholders with Rio Tinto. Whichever way you cut it
the deal will have to be sweentd up. Do they have to make straight statements about managing the
debt? BHP Billiton have a single A rating, Rio Tinto is a triple B, combine it and this is where
you get the idea they can have a single A situation. You to not need special conditions to manage
existing debts and the banks they have been speaking to will be willing to step up T even though
you have a credit crunch any bank looking for a request for finance would be mad the say no. This
is a long stream of assets with a commodity story with 10 years to run with a ready pool of
customers.

How likely is it